A
growing number of home buyers are seeking a sense of community
in their new neighborhoods. Here’s how
some Kellogg real-estate experts are addressing that trend

By Rebecca Lindell

Once upon a time in America, that elusive
sense of community was as abundant as grass on the prairie.

Smaller
neighborhoods meant people knew each other’s
names, and often their hopes, dreams and fears. Front
porches provided opportunities to socialize with friends
and passersby.
Town squares were natural gathering places for communities
devoid of Internet chat rooms and cell phones.

Much of that has been swept away in the
name of progress, replaced by an automobile culture more
concerned with
reality TV than with the reality next door. But are Americans
really
better off isolated inside their cars and behind their
big screens? A growing cadre of researchers, developers
and planners
say no. More important, many are doing something to
revive that sense of connection.

Live/work buildings, with offices on the first floors
and living areas above, in Wilton Manors, Fla.

“We’re social beings,” says longtime Chicago real
estate professional Gary Rosenberg ’62, chairman and
CEO of Canterbury Companies and a member of the Kellogg School
Alumni Advisory Board. “Everyone likes a sense of community,
and everyone wants to have a good feeling about themselves
through the community in which they interact. These days
there’s a natural orientation toward that with respect
to development.”

That trend is bucking a tradition that dates
from the end of World War II, says Tim Hernandez ’84, co-founder
of a firm in Florida that specializes in building community-friendly
developments.

The post-war era bestowed inexpensive mortgages
on the home-buying public, along with a “mass-production mentality in
home-building,” Hernandez says. The result, according
to Hernandez: “shapeless, formless developments without
a sense of community.”

“
For a 50-year period we encouraged dependence on the automobile,” Hernandez
contends. “We created suburban sprawl with all kinds
of negative effects: it polarized society, with the ‘haves’ in
the suburbs and the poor people in the city.

“
All the great places you can think of predated that era,” Hernandez
adds. “Our predecessors used timeless principles of
creating community that have worked for thousands of years.”

A reawakening to the importance of community
is occurring among many real-estate professionals who can’t help
but notice the success of projects that foster a sense of
inclusiveness. Ground-breaking projects like Seaside and
Celebration in Florida, both of which were designed to inspire
a neighborhood feeling, have paved the way for similar developments
around the country.

Such developments are designed to invite
neighbors to interact, through features like front porches
and public gathering
spaces.

Most important, they place many of life’s
necessities within easy walking distance. Housing, shops,
workplaces,
entertainment, schools, parks and other facilities are
near to one another. The goal: to avoid the dependence
on the
automobile that has become a hallmark of suburban life.

That last concern goes beyond aesthetics.
Recent research has pointed to the traditional American
suburb’s design
as a culprit in many of the nation’s health woes, including
obesity, hypertension, depression and high blood pressure.

In fact, Americans who live in the most
sprawling counties tend to weigh 6 pounds more than their
counterparts in the
most compact areas, according to a recent study published
in the American Journal of Health Promotion. The study
shows that, as sprawl increases, so do the chances that
residents
will be obese or have high blood pressure.

Passing the ‘Popsicle test’Many
in the real-estate field, though certainly not all, are
taking that observation to heart. Under the
banner of “New
Urbanism,” they are urging a return to smaller, more
tightly knit communities that emphasize beauty, connection
and nature, even in the heart of a city.

They connect well with surrounding neighborhoods, developments
or towns, while also protecting regional open space.
Communities with gates, without sidewalks or laid
out in a “tree-like” pattern
rather than a grid network don’t qualify.

They
include a variety of uses within their bounds. Developments
that are just housing, just retail or
just offices
don’t
fit the bill. Moreover, the various types of buildings
should all be “seamlessly integrated,” so
that people can move easily between them.

They
include a neighborhood center that is an easy and safe
walk from all dwellings in the development, as
well
as formal civic spaces and squares.

They
feature front doors, porches and windows that face
the street, so
that the neighborhood feels safe and inviting.
Rows of garages — a standard feature of suburbia — are
disdained.

“Finally, there is the ‘Popsicle test,’” says
the organization’s Web site. “An eight-year-old
in the neighborhood should be able to bike to a store to
buy a Popsicle without having to battle highway-size streets
and
freeway-speed traffic.”

The movement’s converts include Hernandez, a former
urban planner who five years ago launched New Urban Communities
with Kevin Rickard in Delray Beach, Florida. Since then,
the company has built about a dozen developments throughout
south Florida that adhere to the principles of New Urbanism.

The company’s growth has been exponential. From zero
closings in 2000 and 40 in 2001, New Urban Communities closed
124 units in 2002. This year, the Kellogg School grad expects
to close about 160 units, all valued at several hundred thousand
dollars. “We’ve exceeded our expectations,” he
says.

Earlier this year, Professional Builder
magazine named the company to its short list of “giant killers” — one
of five small-volume home builders that compete successfully
against the largest developers in their market.
Driven as much by a desire to improve community life
as to see his venture succeed, Hernandez is passionate
when
discussing
his work.

“
I don’t see how you can build a development and then
say that you don’t have a responsibility to the community,” he
says. “What we do is not disposable. It has to stand
the test of time.”

Hernandez’s convictions grow out of his experience.
While working as an urban planner in suburban Chicago in
the early 1980s, he grew frustrated by much of the development
he was asked to oversee. He witnessed “major design
faux pas, a lack of sensitivity to the community, and poor
execution of landscaping, architecture and site plans.”

“
Some people never get this, but you have to put yourself
in the position of the occupant of what you’re building,” Hernandez
says. “You have to ask yourself: ‘If I had to
live in this house, would it be a good experience? What could
make it better?’ I got tired of seeing people coming
in and doing things that could have been improved upon.”

If you build it, they will come
Determined
to do it differently, Hernandez enrolled in The
Managers’ Program to gain the business skills
to open his own firm. During the day, he continued to
work as an
urban planner, taking note of the good, the bad and the
ugly. “Every
day that went by, I felt more and more that this was what
I was meant to do — design and develop communities,” he
says.

Upon graduation, Hernandez joined national
builder Pulte Home Corp., where he spent 16 years learning
the development
trade from the ground up. Hernandez gained experience in
marketing, land acquisition and development, first in Illinois
and then in Florida.

In 1998, a mutual acquaintance put him in
touch with Rickard, a custom home builder in Palm Beach
County who shared his
philosophy. Together they launched New Urban Communities
with a project that transformed a former bank drive-through
in Florida’s Delray Beach into 32 town houses steps
away from shops, entertainment, dining and recreation. The
project sold quickly and inspired several similar developments
nearby by other local builders.

The project set the tone for New Urban Communities
and embodied its emphasis on “infill” development — small
urban sites that have been overlooked by larger developers.
Building on such sites results in less of the environmental
damage and traffic congestion caused by urban sprawl, Hernandez
says. It also helps revitalize downtown areas, placing the
amenities of urban life within walking distance of residents.

“
We’re huge on trying to become part of the community,
instead of walling ourselves off from the community,” says
Hernandez, whose firm is now seeking to build similar developments
in Chicago. “We’re trying to make the entire
area around us better, instead of just our own little area.”

That approach seems to be striking a chord
with a growing number of homebuyers, according to the Congress
for New
Urbanism.

Surveys cited by the group suggest that
at least 15 percent of all buyers prefer walkable, compact
neighborhoods rather
than large homes on large lots. Those numbers have recently
risen to near 30 percent, as empty nesters and retirees
seek to trade their suburban abodes for smaller homes with
foot
access to shopping, the CNU says.

And buyers are willing to pay for the experience
of living in such an area. The organization has documented
that homes
in New Urbanist neighborhoods typically sell for 25 percent
more than their counterparts in other areas.

The effects of the appreciation tend to
spill over into surrounding areas as well. Hernandez cites
his company’s second
project, in Lantana, Florida, which placed 43 townhouses
and 16 single-family homes in a stagnant neighborhood. The
project sold out quickly, and other new development in the
area soon followed.

“
There had been nothing going on in that area for at least
20 years,” he says. “When we went in there, you
could buy a one-story concrete block home for less than $90,000.
Now, housing prices in that area are up by about 50 percent.”

At home in the cityEven
in the heart of a city like Chicago, developments that
seek to enhance a feeling of community — even if not
overtly identified as New Urbanist in design — are
meeting with success. The Grand Plaza, a two-tower apartment
complex, opened recently in Chicago’s Loop. In addition
to 764 apartments, it features a health club, a business
center, outdoor and indoor pools, a running track and ample
landscaping, among other amenities.

The developers also chose to locate a houseware
store and a major grocery store in the complex not only
for the convenience
of residents, but for the use of the greater community,
says Alan
Schachtman, a senior vice president at developer
U.S.
Equities, Inc. and a Kellogg School adjunct professor of
real estate.

Doing so not only makes good business sense,
says Schachtman. It also increases the vitality of the
surrounding area.

“
Any development that’s worth its salt will try to find
out what people in the community want and need,” he
says. “That doesn’t mean that everyone from the
community will use it, but you do have to take the needs
of the larger population into account.”

A licensed architect, Schachtman has worked
on many public facilities, including the Evanston Public
Library and the
United Airlines terminal at Chicago’s O’Hare
Airport. Both bring an element of the outdoors into the
facility — an
approach that he knew would bode well for Grand Plaza as
well.

“
Our goal was to make Grand Plaza as popular and attractive
a place as we could,” says Schachtman. “It wasn’t
just a pure profit motive — it was what was going to
give us the best success all around. If we were only interested
in maximizing our profits, we wouldn’t have done as
much landscaping as we did. As it turns out, when we put
the landscaping in, we started renting units faster than
after anything else we’d done.

“
As of Nov. 1, we’re 85 percent leased, so I guess we
got at least some of it right.”

So if developments that promote a sense
of community are proving so popular, what’s standing in the way of creating
more?

First, there is the entrenched design of
the American suburb, coupled with cities that are already
built to capacity. Rosenberg
notes that “master-planned communities” that
provide a host of amenities for residents thrive in areas
such as Arizona, where miles of open land have made such
developments possible.

Second, and just as powerful, are zoning
requirements that date from the “post World War-II era that dictate what
makes a good, homogenous community, not necessarily an interesting,
vibrant place,” says Hernandez.
Such requirements often prohibit alleys, which means garages,
rather than porches and sidewalks, dominate neighborhood
streets. They also tend to bar businesses from operating
in the same areas residents live. Segregating businesses
from homes almost requires people to drive rather than
walk while running errands.

Other laws mandate that buildings be set
back deeply from the street, further reducing the likelihood
that neighbors
will interact. And many areas practically encourage residents
to keep their distance from each other by sharply limiting
the number of buildings that can be built on a parcel of
land.

Lys argues that values that define “community” are
subjective, and hence are better put to public bodies
such as planning commissions and zoning boards.

“
If this is really important and you entrust it to individuals,
what if you get the wrong individuals?” he asks. “It’s
my preferences versus your preferences. People have very
strong views, and there’s no right answer. If you don’t
let the market decide, then you need to appoint a king of
taste — a czar who decides whether you can paint your
house pink.

“
The society needs to determine what’s acceptable,” Lys
concludes. “Zoning in many respects decides the rules
of the game. Let them play.”

Others say the responsibility for creating
more liveable communities rests primarily with those who
build them.

“
My experience is that it isn’t zoning that creates
a sense of community, it’s the thought and sensitivity
of the developer as to the dynamics of the facilities and
how they meet people’s needs,” says Rosenberg. “It’s
a private sector thing, very highly integrated with the work
of public bodies.”

Developers, public officials and home buyers
are likely to be persuaded by the success of what’s gone before.
In that regard, Hernandez believes his record speaks for
itself.

“
We’ve proven that we can do these projects, and that
they’re not that far-out,” Hernandez says. “People
like living in these places, and property values are not
going down.

“
We have to ask ourselves: are we giving buyers what they
want, or do they just want what we’ve given them?” he
adds. “Sometimes people say they prefer something because
they have a very limited number of choices. But if they’re
offered other choices, they might choose them and like them.”